Is It Legal To Set Minimum Resale Prices?

Setting a consistent price across your retailers can feel like good business sense. It protects your brand positioning, avoids “race to the bottom” discounting and keeps your stockists happy.

But in Australia, telling your retailers the lowest price they can charge is a legal minefield. This practice has a specific name - resale price maintenance - and the general rule is that it’s against the law.

In this guide, we’ll explain what counts as resale price maintenance, when (and how) it may be permitted, and practical, low‑risk alternatives for managing pricing while staying compliant with Australian competition laws. We’ll also share the contracts and processes that help you roll out a lawful pricing strategy across your sales channels.

What Is Resale Price Maintenance (RPM)?

Resale price maintenance (RPM) is when a supplier tries to control the price at which a reseller (like a retailer, distributor or franchisee) sells the supplier’s goods or services.

In simple terms, RPM happens if a supplier:

• Sets a minimum price the reseller must charge
• Prevents the reseller from discounting below a certain price
• Withholds supply, threatens penalties or offers incentives to make the reseller stick to a minimum price
• Requires the reseller to advertise at or above a price floor (including enforcing “minimum advertised price” conditions)

By contrast, simply suggesting a price - for example, publishing a Recommended Retail Price (RRP) - is generally allowed, as long as you don’t pressure or coerce the reseller to follow it. We cover RRPs in more detail below.

Is Setting Minimum Resale Prices Legal In Australia?

Generally, no. RPM is prohibited under the Competition and Consumer Act 2010 (CCA). The Australian Competition and Consumer Commission (ACCC) can take action if a supplier engages in RPM, and penalties can be very significant.

How Serious Are The Penalties?

Courts can impose heavy civil penalties for anti‑competitive conduct. For companies, maximum penalties can reach the greater of a substantial fixed amount, three times the value of the benefit, or a percentage of annual turnover. Individuals can also face personal penalties and orders. In addition, customers and competitors may seek damages if they suffer loss.

This is one area where prevention is far cheaper than cure - a short pricing email or a sales team “warning” to a discounting retailer can trigger an investigation.

Are There Any Exceptions?

There are two key pathways where minimum pricing controls may lawfully proceed:

• ACCC Authorisation: You can apply for authorisation to engage in RPM if the public benefits are likely to outweigh the harm to competition. The ACCC weighs evidence and may approve conduct subject to conditions.
• Notification for RPM: Since law reforms in 2017, you can lodge a notification to obtain protection for proposed RPM conduct, provided the likely public benefits outweigh likely detriments. Protection typically starts shortly after lodgement unless the ACCC objects.

Both options require careful preparation and clear evidence of benefits (for example, supporting a new product launch where retailers need margin certainty to invest in promotion and service). If this is on your radar, it’s wise to get tailored ACL advice before taking any steps.

What Pricing Controls Are Allowed?

Even if minimum resale prices are generally off‑limits, there are several lawful tools you can use to influence pricing and protect your brand.

Recommended Retail Prices (RRPs)

Issuing an RRP or “suggested retail price” is lawful. You can publish a price list, include RRP on packaging, or communicate suggested pricing to resellers.

The crucial point: you must not pressure resellers to follow the RRP. That means no threats, no withholding supply, and no incentives tied to sticking to the RRP. For advertising claims and labelling practices around RRPs, it’s useful to keep in mind broader advertised price laws and avoid anything that could mislead consumers about discounts or savings.

If you’re weighing up RRPs versus other pricing approaches, this explainer on RRP vs MSRP is a helpful refresher on Australian rules.

Maximum Resale Prices

Setting a maximum resale price (a price cap) is not RPM. Suppliers can stipulate that resellers must not exceed a maximum price. However, maximum pricing may still raise competition issues in certain markets if it substantially lessens competition. If you plan to impose caps broadly across a category, get advice on the competitive effects.

Minimum Advertised Price (MAP) Policies

MAP policies are common overseas, but in Australia they are risky. A MAP that prevents resellers from advertising below a floor price - particularly if backed by threats (like supply suspension) or penalties - is likely to be treated as RPM.

That said, you can set non‑price advertising standards (for example, brand presentation or bundling rules) that don’t restrict the reseller’s actual or advertised price. Keep these standards focused on brand integrity, not price.

Genuine Agency Models

If a reseller is a genuine agent selling your goods on your behalf (you set the price, title doesn’t pass to the agent, and the agent doesn’t bear key commercial risks), then you can set the retail price because it’s effectively your price. However, the arrangement must be a real agency in substance, not just in name. If the “agent” buys and resells on its own account or bears key risks, price controls could be RPM.

Common Scenarios And How To Handle Them

Distributors And Resellers

It’s standard to agree recommended pricing and marketing plans with distributors. You can reinforce brand standards and product positioning without restricting their freedom to discount. A tailored Distribution Agreement or Reseller Agreement can set clear non‑price obligations (territories, service levels, marketing quality, customer support) while steering clear of RPM.

Franchise Networks

Franchisors often want price consistency across outlets. While you can promote RRPs and coordinate promotions, you shouldn’t force franchisees to sell at or above a minimum price unless you’ve obtained ACCC authorisation or RPM notification protection. When reviewing or drafting your Franchise Agreement, make sure any pricing clauses are carefully structured to avoid RPM risk.

Online Marketplaces And Price Matching

If resellers sell on marketplaces (or you run your own online store), you can set brand presentation rules, minimum service standards (like delivery times) and product content requirements. You can also run your own promotions. What you shouldn’t do is penalise retailers who undercut your RRP or tell them they must match your online price. That can cross the line into RPM if it restricts discounting.

Retailer Complaints About “Free Riding” Or Discounting

It’s common for full‑service retailers to complain about online discounters “free riding.” You can listen, but be careful about your response. Avoid contacting the discounter to insist on a minimum price or hinting that supply will be affected. Instead, look at non‑price tools - for example, improved brand guidelines, differentiated product bundles, or channel‑specific value adds that don’t restrict discounting.

How To Stay Compliant: Practical Steps

1) Train Your Team

Make sure sales, marketing and account managers understand the RPM rules. A quick call to a discounting retailer saying “you’re not allowed to sell below $X” is all it takes to create legal exposure.

2) Keep Communications Clean

If you publish RRPs, label them clearly as “recommended” and avoid language that looks like a requirement. Don’t threaten supply penalties - and don’t implement them - if a reseller discounts.

3) Use Non‑Price Levers

Strengthen brand standards, merchandising requirements, product training and service obligations. These protect your positioning without touching price. Embed them in your Distribution Agreement or Reseller Agreement, and align your retailer scorecards to compliance with these non‑price metrics.

4) Review Advertising And Promotions

Ensure your promotions, labels and price statements comply with advertised price laws and general consumer protection rules (for example, don’t exaggerate discounts against RRPs that no one actually charges). It also pays to sanity‑check broader ACL risks like misleading or deceptive conduct.

5) Consider ACCC Processes If You Need Minimum Prices

If you have a strong case that minimum prices will deliver public benefits (for instance, funding essential retailer services for a complex product launch), talk to us about preparing an ACCC notification or authorisation application. The standard for approval is high, but it can be done with the right evidence and safeguards.

6) Tighten Your Contracts And Policies

Review contracts to remove any minimum price restrictions or “no discounting” clauses that could be RPM. At the same time, make sure your non‑price requirements are clear, reasonable and enforceable - and consider a competition‑law escalation protocol for complaints about discounters.

7) Check For Other ACL Traps

While you’re updating documents, it’s worth reviewing terms for unfair contract risks, especially if you deal with small businesses or consumers. Our UCT review service can help you align your templates with current unfair contract term laws under the ACL.

What Legal Documents Will Help Manage Pricing Lawfully?

Getting your paperwork right helps you reinforce brand and channel strategies without crossing into RPM. Depending on your model, consider:

• Distribution Agreement: Sets clear non‑price obligations, territories, service levels, branding, product support, KPIs and compliance processes - without mandating minimum resale prices. Link pricing references to RRPs only. Distribution Agreement
• Reseller Agreement: Useful for online and brick‑and‑mortar resellers. Focuses on brand standards, authorised channels, content quality and customer service, avoiding any price floor. Reseller Agreement
• Franchise Agreement: For franchise networks, ensure pricing clauses are RRP‑based or promotion‑based unless ACCC protection is in place. Have your Franchise Agreement review include an RPM check.
• Terms Of Trade: Your standard customer supply terms can include order processes, delivery, warranties and payment - and should avoid any minimum resale pricing obligations.
• Marketing And Brand Guidelines: A policy setting out non‑price branding and merchandising requirements, approved claims, and product content standards for retailers and partners.
• Competition Compliance Guidelines: Internal rules and training notes for staff outlining RPM risks, how to handle price complaints, and approval steps before any pricing communication to resellers.
• ACL Support: For consumer‑facing claims and promotions, have a clear sign‑off process and access to quick ACL advice before you run major price‑led campaigns or introduce new price annotations.

If you sell direct as well as through partners, consider aligning website disclosures and promotions with your channel strategy. Your online claims should be consistent with your reseller messaging and comply with ad and pricing standards - our piece on advertised price laws is a useful companion.

Key Takeaways

• Setting minimum resale prices (RPM) is generally illegal in Australia; the ACCC can seek significant penalties for suppliers that pressure resellers not to discount.
• You can lawfully use RRPs, set maximum prices, implement genuine agency models, and enforce non‑price brand and service standards without restricting discounting.
• MAP policies and any threats to cut supply for discounting are high‑risk and often treated as RPM in Australia.
• If you believe minimum prices deliver public benefits, consider ACCC authorisation or notification - but prepare strong evidence and get legal guidance first.
• Strengthen compliance by training your team, cleaning up pricing communications, and using carefully drafted channel agreements that avoid RPM clauses.
• Keep your broader consumer law house in order: align promotions with advertised price rules and review contracts for unfair terms under the ACL.

If you’d like a consultation on pricing compliance and how to avoid resale price maintenance risk, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.